London: Despite a historic reluctance by the pharmaceutical industry to use management consultants, a new report released today finds that spend on consultants in UK pharma leapt 11 per cent to £194million in 2014. This compares favourably with a 6.6 per cent average growth rate across the UK consulting sector.
The report from leading global consulting market analysts, Source Information Services (Source) says that the main drivers of this growing use of consultants in pharma has been regulation, the need to cut costs, and post-merger activity. Pricing pressures also mean that life sciences companies are looking to find new revenue streams to provide services to consumers rather than just products.
All of this has led to companies reassessing their business models and undertaking major transformations.
Andy Tinlin, Managing Director of Accenture, who was interviewed for the report, said: "Life sciences have been a particularly active consulting market: not only are companies there grappling with new regulation, but they're also increasingly offering a service, not just products; they're increasingly having to deal with consumers. On top of that there's also a wave of M&A activity in the process of washing over the sector."
John Goddard from L.E.K. Consulting agreed: "We saw strong demand for consulting work in the life sciences sector: pharmaceutical companies face intense pressure around pricing and reimbursement, and around operational efficiency and market access. The focus isn't just on cost reduction, but also on finding new streams of revenue."
B.J Richards, Senior Editor from Source Information Services, added: "The sheer weight of the many demands pharma faces seem to have made this previously reluctant group eager to explore what management consulting can offer. From cost-cutting initiatives to regulatory requirements to post-M&A integration, there's a lot to do, and consultants are ideally suited to help."